April 25 (Reuters) - Southwest Airlines slashed its estimates for new aircraft deliveries from Boeing in 2024 for the third time on Thursday and said it plans to undertake cost-cutting measures to ease the resultant blow.
The airline said it will limit hiring and offer voluntary time off programs and expects to end the year with about 2,000 fewer employees compared to 2023. Shares of the carrier fell 9.2% in morning trading.
Boeing has been under heavy regulatory scrutiny following a Jan. 5 Alaska Airlines (ALK.N), opens new tab mid-air panel blowout that led to probes into the manufacturer's safety and quality standards in its production processes.
Southwest, a loyal Boeing customer, expects to receive 20 aircraft this year, compared with its previous estimate of 46, pressuring the budget carrier's plans to expand capacity to tap into a robust demand environment.
It was originally supposed to receive 85 jets in 2024.
Reuters had exclusively reported the delivery cuts earlier this month.
The U.S. FAA has also barred Boeing from expanding the production of its bestseller 737 MAX jet, while uncertainty looms over the certification timelines for its MAX 7 and 10 models.
"The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025," Southwest CEO Bob Jordan said on Thursday.
The carrier also trimmed its operating revenue expectations for 2024 and now expects a high-single-digit growth, compared with its previous expectation of double-digit growth in operating revenues compared to last year.
Southwest reported a loss of $231 million, or $0.39 per share for its first quarter ended March 31, compared to $159 million, or $0.27 per share a year earlier.
The airline will also close operations at four airports to address cost and capacity headwinds.
It has cut its annual capacity forecast and now expects available seat miles to be up about 4%, compared with its previous estimate of about a 6% growth.
Southwest Airlines' operating revenue rose 10.9%, to $6.33 billion, compared with last year.
